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Iowa Utilities Get Pushback on Plans for Higher Rooftop Solar Rates

May 3, 2016 By Cheryl Kaften

Two utilities that want to change the way solar customer-generators are reimbursed in Iowa are meeting with strong resistance from state legislators – more than 30 of whom sent a letter to the members of the Iowa Utilities Board (IUB) on April 27 in protest of the energy industry proposals (Docket No. NO1-2014-0001).

Five months after the IUB directed MidAmerican and Alliant to develop pilot projects that would “expand renewable (distributed generation) in Iowa,” the utilities have come back with plans for community solar aggregation – under which they would generate solar energy, not their customers. In addition, MidAmerican would install a one-megawatt (MW) battery, to test the advantages of integrating energy storage with the grid.

MidAmerican serves about 750,000 electric customers in Iowa; Alliant (Interstate Power & Light) serves about 525,000.

For customer-generators who already operate interconnected rooftop solar or wind systems, payback would be lower under the utilities’ new proposals. Alliant has proposed that any excess generation from these systems would be reimbursed at the wholesale rate, which is often just 20 percent to 30 percent of the retail price that self-generators receive now. MidAmerican has proposed a monthly demand charge – to be predicated on the customer’s peak energy use in a given month.

In their letter, the legislators point out the many efforts that they have made to date to grow the solar industry in Iowa, noting, “The General Assembly has enacted and expanded solar tax credits. By the end of 2015, the credit had results in more than 1,800 projects, spanning 92 counties, leveraging a total investment of more than $85 million since 2012.

We have seen firsthand,” they said, “how a growing solar market benefits all Iowans. Businesses, homeowners, and public entities, alike, have taken advantage of solar installations to better control their energy use and meet sustainability goals. We also have seen small businesses grow and hire more people in order to help design, install, and operate solar systems. We want this industry to continue to thrive and for Iowans to continue to enjoy the benefits of small –scale solar power.”

However, the signatories to the letter noted, “We do not think it is appropriate to create a separate rate class for solar/renewable customers as part of these projects. Nor do we find it appropriate to experiment with or substantively change net metering policies through pilot rate design. If the pilot projects move in this direction, they will stifle a promising market, prevent Iowa from reaching our potential as a solar leader, and directly contradict the board’s interest in expanding renewable distributed generation in Iowa.”

The legislators were supported by a number of environmental advocacy groups – among them, The Alliance for Solar Choice, which wrote to the IUB on April 18, contending, “Unfortunately, the utilities have presented new distributed generation (DG) rate design proposals that are inconsistent with the order’s request for limited pilot programs. Rather than propose pilot programs to expand DG or modify existing DG policy as requested by the order, MidAmerican and IPL have proposed new rate structures for all future DG customers. These proposals plainly go beyond the pilot programs the Board envisioned in its October 30, 2015, order.”

For their part, MidAmerican and Alliant make the now-familiar argument that the state’s net-metering customers are not paying enough to cover the costs of the transmission network – and that their regular customers are picking up the bills. “The need for some type of new pricing structure is about fairness for all MidAmerican customers,” the utility said in an IUB filing.

The IUB case probably will not be decided for several months. The legislators ended on a positive note, saying, ““We encourage the Board to stay the course and focus on actions that increase renewable generation while continuing to collect data on distributed solar power before considering any policy changes. With a data-driven approach designed to maximize the potential for renewable energy development in Iowa, our future will remain bright.”

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